Middleby Corp (MIDD)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,404,790 | 2,502,540 | 2,586,300 | 2,055,930 | 1,631,210 |
| Inventory | US$ in thousands | 841,567 | 935,867 | 1,077,730 | 837,418 | 540,198 |
| Inventory turnover | 2.86 | 2.67 | 2.40 | 2.46 | 3.02 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $2,404,790K ÷ $841,567K
= 2.86
Middleby Corp's inventory turnover ratio has shown variations over the past five years. In 2020, the inventory turnover was 3.02 times, indicating that the company's inventory was sold and replaced approximately three times during the year. However, in the following years, the inventory turnover decreased to 2.46 times in 2021, 2.40 times in 2022, before picking up slightly to 2.67 times in 2023 and further to 2.86 times in 2024.
A declining inventory turnover ratio could suggest a slowdown in sales relative to the level of inventory held, which may lead to potential issues like obsolete inventory or increased storage costs. However, the recent increase in the inventory turnover ratio in 2023 and 2024 may indicate an improvement in sales efficiency or better inventory management practices.
Overall, Middleby Corp should continue monitoring its inventory turnover ratio to ensure optimal inventory management and aligning it with the level of sales to maximize profitability and efficiency.
Peer comparison
Dec 31, 2024